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Pursuant to a congressional request, GAO reviewed the export control jurisdiction decisions the Departments of State and Defense (DOD) made regarding certain military sensitive items.

GAO found that: (1) State and DOD agreed to transfer over two dozen commodities, including vessels and explosives, to the Department of Commerce; (2) State and DOD identified several items that should be retained on the U.S. munitions list (USML) for national security reasons; (3) Commerce argues that dual-use items belonged on the Commerce control list (CCL) and DOD and State had to prove why the transfer of the items to CCL would jeopardize national security; (4) State agreed to transfer nonmilitary inertial navigation system (INS) technical data and nonmilitary technical data to Commerce if it would impose a new foreign policy control to relieve DOD concerns; (5) in March 1992, State, DOD, and Commerce signed a memorandum of understanding detailing conditions for the transfers; (6) jurisdiction over certain technologies for commercial jet engines has been a constant problem, since State and Commerce claim jurisdiction; (7) while State has generally denied licenses for exports related to jet engine technologies, Commerce has approved such licenses; (8) DOD argued that jet engine technologies should remain on USML to maintain an air combat advantage for U.S. forces over potential adversaries; and (9) State controls all technologies associated with the design, manufacture, production, development, repair, and overhaul of jet engines.

Recommendations for Executive Action

Comments: In March 1996, the administration announced that export control jurisdiction over hot-section technology used in commercial jet engines would be transferred to the Department of Commerce.

Recommendation: To ensure appropriate and adequate control over only those hot section technologies that Defense considers sensitive and critical to U.S. national security, the Secretary of State should direct the Center for Defense Trade to identify, with the assistance of Defense and other agencies as appropriate, specific hot section technologies in which the United States leads the world and are militarily critical and assert jurisdiction over those technologies.

Agency Affected: Department of State

Status: Closed - Implemented

Comments: State reexamined its decision but determined that the conditions in the original interagency MOU together with recently added conditions imposed through an amendment made to the MOU would adequately protect national security interests in the transfer of the sensitive items to Commerce's jurisdiction.

Recommendation: Because of the militarily sensitive nature of the items involved, the Secretary of State should direct the Center for Defense Trade to, if the risks to national security interests are determined to be significant, retain the item or items on USML.

Agency Affected: Department of State

Status: Closed - Implemented

Comments: DOD reexamined its decision but determined that the added conditions imposed through a recent amendment made to the interagency MOU would permit the transfer of the sensitive items to Commerce's jurisdiction without adversely affecting national security interests.

Recommendation: Because of the militarily sensitive nature of the items involved, the Secretary of Defense should direct the Defense Technology Security Agency to, if the risks to national security interests are determined to be significant, retain the item or items on USML.

Agency Affected: Department of Defense

Status: Closed - Implemented

Comments: State reexamined its decision but determined that conditions in the original interagency MOU together with recently added conditions imposed through an amendment made to the MOU would adequately protect national security interests in the transfer of the sensitive items to Commerce's jurisdiction.

Recommendation: Because of the militarily sensitive nature of the items involved, the Secretary of State should direct the Center for Defense Trade to, in view of the key differences between the two export control regimes and other concerns GAO identified, jointly examine the national security implications of transferring to Commerce's jurisdiction the following items: nonmilitary INS technical data, nonmilitary focal plane arrays and second-generation and above image intensification tubes, commercial systems containing such components, and related technical data.

Agency Affected: Department of State

Status: Closed - Implemented

Comments: DOD reexamined its decision but determined that the added conditions imposed through a recent amendment made to the interagency MOU would permit the transfer of the sensitive items to Commerce's jurisdiction without adversely affecting national security interests.

Recommendation: Because of the militarily sensitive nature of the items involved, the Secretary of Defense should direct the Defense Technology Security Agency to, in view of the key differences between the two export regimes and other concerns GAO identified, jointly examine the national security implications of transferring to Commerce's jurisdiction the following items: nonmilitary inertial navigation system (INS) technical data, nonmilitary focal plane arrays and second-generation and above image intensification tubes, commercial systems containing such components, and related technical data.

Agency Affected: Department of Defense

Status: Closed - Implemented

Comments: In March 1996, the administration announced that export control jurisdiction over all hot-section technology used in commercial jet engines would be transferred to the Department of Commerce.

Recommendation: To ensure appropriate and adequate control over only those hot section technologies that Defense considers sensitive and critical to U.S. national security, the Secretary of State should direct the Center for Defense Trade to transfer jurisdiction over all other hot section technologies for commercial engines to Commerce.